WhatsApp Image 2023-02-26 at 9.49.20 AM (1)
WhatsApp Image 2023-02-26 at 9.49.20 AM

SC refers Kerala loan case to Constitution bench

Kochi: The Supreme Court on Monday referred to a Constitution bench Kerala government‘s prayer seeking to raising the ceiling on net borrowing, media reports said. 

Kerala in its plea accused the Union government of arbitrarily restraining its borrowing limits pushing it into a financial emergency.

The division Bench observed that the Centre had already allowed a “substantial relief” of ₹13,608 crore to the State.

The court referred Kerala government ‘s prayer to raising the ceiling on net borrowing to a five-judge Constitution bench. 

The division bench passed the order on the State’s suit, accusing the Centre of interfering in its “exclusive, autonomous and plenary powers” to regulate the state’s finances by imposing a cap on borrowing.

In an original suit filed under Article 131 of the Constitution, the Kerala Government has said the Constitution bestows fiscal autonomy upon States to regulate their finances under various articles.

The 15th Finance Commission cut short the net borrowing limit of Kerala, citing funds that were allotted to the State by the previous Finance Commission.

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